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☆ The Fed wants higher unemployment because it would bring down inflation
▼ + stars: | 2023-03-10 | by ( Phil Rosen | ) www.businessinsider.com time to read: +7 min

Powell testified abou the Federal Reserve's semi-annual monetary policy report to Congress and the state of the economy Chip Somodevilla/Getty1. A reading of 200,000 or more jobs added in February means we're getting a bigger rate hike this month. Fed Chair Jerome Powell said this week that the trajectory of monetary policy doesn't hinge solely on today's jobs report, but markets are still bracing for impact. Remember, the Fed's stated goal is a 2% inflation rate. Meanwhile, Wharton's Jeremy Siegel said Thursday that the Fed is taking a flawed policy approach, and it shouldn't be so focused on jobs.

☆ Bank of America stock chief Savita Subramanian told us why she thinks investors are using the exact wrong playbook for the oncoming recession, and what they should do instead
▼ + stars: | 2023-03-08 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

Savita Subramanian says investors need to update their approaches as the economy slows down. Bank of America's US stock chief told Insider she's very wary of tech stocks and long-term bonds. In a recent interview with Insider, however, Subramanian pushed back on the idea that she's a bear. She's telling investors to overweight materials, energy, consumer staples, and financials in their stock portfolios. Stocks have outperformed bonds dramatically since that last high, and investors might start dumping bonds if they're disappointed by their returns again.

☆ Merrill financial advisor survey shows they love cash and bonds, but hate stocks
▼ + stars: | 2023-03-08 | by ( Scott Schnipper | ) www.cnbc.com time to read: +2 min

Almost 400 financial advisors surveyed at Bank of America's Merrill Lynch unit said they favor bonds and cash the most for investment portfolios, with stocks at a "distant third," a report out Wednesday said. Bonds as a percentage of portfolios climbed to 27% when the survey was taken in late January and early February, up from 24% a year earlier. The average allocation to cash climbed to 10% from 7% a year ago, while stocks fell to 57% from 62%. With the surplus cash that's being generated in portfolios, 26% of advisors plan to buy stocks, down from 42% last year. Meanwhile, 29% intend to put the money into bonds and 30% "are happy to remain in cash."

☆ Bank of America's stock chief warns the S&P 500 could fall another 26% as valuations remain too elevated and decades of market history show half of the criteria for a bottom still aren't being met
▼ + stars: | 2023-03-04 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

The S&P 500 could fall to as low as 3,000, they said. In a note this week, Wilson said that the S&P 500 remains overvalued relative to history by price-to-earnings and price-to-sales metrics. S&P 500 P/E multiples are 9% above their median while P/Sales multiples are 23% above median," Wilson said. "History implies that for the current level of real rates the S&P 500 multiple is ~2.5x overvalued," the chief market strategist said. Wilson's end-of-year target for the S&P 500 is 3,900, while Krishna and Kolanovic have targets of 3,725 and 4,200, respectively.

☆ Since David Solomon became Goldman Sachs CEO, more than 80 partners have left. See the running list here.
▼ + stars: | 2023-03-03 | by ( Carter Johnson | Dakin Campbell | ) www.businessinsider.com time to read: +6 min

David Solomon has been Goldman Sachs' CEO for more than four years since succeeding Lloyd Blankfein. There's been a lot of talk about the morale at Goldman Sachs. In reality, Solomon said, there were fewer "partner transitions at Goldman Sachs" in 2022 than any year "going back to 2014." "At the moment, year-to-date, our turnover is at a 5-year low, not just for partners, in the whole firm," Solomon added. Here is a running list of Goldman's partners that have retired from the firm — or moved on to roles at other companies — since Solomon became CEO.

☆ These are the highest quality stocks in the S&P 500 that could win in this volatile market
▼ + stars: | 2023-03-02 | by ( Hakyung Kim | ) www.cnbc.com time to read: +3 min

Quality stocks are about to outperform this year, according to Bank of America. Against such a backdrop, equity strategist Savita Subramanian at Bank of America advised investors to own high quality stocks — specifically stocks with a rated high quality by S & P. A basket of such stocks outperformed low quality stocks by 1.2% in February. "Tailwinds for Low Quality from fiscal and monetary stimulus are now over, and we recommend owning High Quality stocks," she added. To be sure, Subramanian said that while high quality shares are still lagging low quality shares year-to-date, the bank anticipates the economy entering a downturn, during which quality factors have typically outperformed. With this in mind, CNBC screened for stocks in the S & P 500 that had the highest quality rating of A+ as determined by S & P Global Market Intelligence.

☆ The stock market is about to get a signal to buy - and it's 'old economy' sectors like materials that will be worth a look, Bank of America says
▼ + stars: | 2023-03-01 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

A buy signal is about to flash for stocks, Bank of America said Wednesday. The S&P 500 is hovering close to the firm's year-end target of 4,000. Investors should take a look at "old economy" sectors like materials and energy. "But we do see stock selection opportunities, particularly in old economy sectors that have been starved of capital for 10+ years." The sector, which has a nearly 3% weighting on the S&P 500, is also most exposed to China's reopening after its extensive COVID lockdowns.

"I think that we have a very good candidate for the World Bank," French Finance Minister Bruno Le Maire said of Banga during a news conference at the G20 finance leaders meeting in India. The comments marked a turnabout from Tuesday, when Germany's international development minister, Svenja Schulze, who represents a different party in Germany's coalition government, said the next World Bank chief should be a woman. The G20 ministers meeting is being held on the outskirts of the Indian tech hub city of Bengaluru. 'UNIQUE SET OF SKILLS'The United States, the lender's dominant shareholder, has chosen every World Bank president since the founding of the institution at the end of World War Two. World Bank staff are bracing for Banga to make some management changes at the bank, emboldened by Yellen's repeated calls for "bolder and more imaginative" action by the bank, two bank sources told Reuters.

☆ JPMorgan says Q1 could mark high point for stocks in 2023, sees warning signs mounting
▼ + stars: | 2023-02-21 | by ( Fred Imbert | ) www.cnbc.com time to read: +2 min

Don't expect the market's early 2023 momentum to last, JPMorgan Chase warned. The S & P 500 is up more than 6% since the start of the year, recovering some of the lost ground from 2022. Further gains will be harder to come by as warning signs continue to mount, JPMorgan strategist Mislav Matejka said in a Monday note. The Fed hiked rates at its Jan. 31-Feb. 1 meeting by 25 basis points, down from 50 basis points at its December meeting. Subramanian upgraded materials to overweight from underweight and communication services to market weight from underweight.

☆ A former BlackRock stock chief says he thinks the S&P 500 will fall another 17% as investors ignore a growing mountain of tell-tale recession signals
▼ + stars: | 2023-02-18 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Doll says the S&P 500 will drop to 3,400 if a mild recession unfolds. If a more normal recession (more severe than a mild downturn) comes, Doll said the index could fall to 3,000. The Fed's recession probability tracker based on the yield curve also now puts the odds of a recession at 57%. Subramanian expects the S&P 500 to fall as low as 3,000, a view shared by Morgan Stanley's Mike Wilson. If trouble hits, like Doll and much of Wall Street expects, stocks could extend their fall to new lows.

☆ A Bank of America indicator just signaled the economy is tipping into a recession. Their stock chief shares 5 trades that are likely to outperform the rest of the market based on decades of history.
▼ + stars: | 2023-02-15 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

Bank of America shares where to invest in a recession: high quality; low risk; large caps; small caps; and stocks that generate high free cash flow. It can be difficult to pinpoint where in a market cycle stocks are — to be able to tell whether there's further downside in a sell-off, or whether stocks have already seen their lowest point. "We have found that factor behavior is relatively predictable during different phases of the US Regime Indicator," Subramanian added. Bank of AmericaFurther, Subramanian said stocks that generate high cash flow should also outperform in the current late cycle environment and into the downturn phase. "As the market cycle matures, companies that continue to generate healthy free cash become scarcer and sought after," she said.

☆ Why all the big bank equity analysts think the market is going to drop
▼ + stars: | 2023-02-06 | by ( Samantha Subin | ) www.cnbc.com time to read: +3 min

After a stellar start to 2023, many big bank analysts are skeptical that this rally can continue and urge investors to prepare for another leg lower. "We believe investors should fade the YTD rally as recession risks are merely postponed rather than diminished," wrote JPMorgan's Marko Kolanovic in a January note to clients. Meanwhile, Barclays' Venu Krishna wrote in a Monday note that equities have "jumped the gun." Several factors, including falling recession risks and a correction in the CBOE Volatility Index and other spreads, also support a long-due fade in the market rally, wrote Credit Suisse's Patrick Palfrey in a January note. "We continue to recommend that equity investors position defensively and be prepared for additional volatility ahead," she said.

It is rare for investors to take short positions in securities of Indian companies. Securities rules in India also make it hard to quietly build short positions. Institutional investors are obliged to disclose their short positions upfront and there are other restrictions and registration requirements on foreign investors. In Adani, for example, Hindenburg held the short positions through U.S.-traded bonds and non-Indian-traded derivatives. China's strict investment rules make it all but impossible to take short positions in domestic-listed Chinese stocks from overseas.

☆ The 60/40 investing strategy posted one of its best months ever after a nightmare 2022
▼ + stars: | 2023-02-03 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +2 min

After the worst yearly performance ever in 2022 , the standard portfolio of 60% stocks and 40% bonds had a solid rebound in the first month of the new year. The gain was just below the 6.3% total return of the S & P 500 in the same timeframe, recouping losses from December. "We view the rally as sentiment-driven, given how bearish consensus was on 1H23 heading into this year," said Subramanian. .SPX YTD mountain spx ytd Rebound rally The sharp rebound in January was led by the worst-performing sectors in 2022. That's a drastic difference from last year, when both stocks and bonds fell, slamming investors who used the assets to balance their portfolios.

☆ India Budget 2023: Here's what the experts say
▼ + stars: | 2023-02-01 | by ( ) www.reuters.com time to read: +13 min

"This budget, therefore, has rewritten the rules for financilisation of savings in India, which will induce expenditures rather incentivise savings. LAKSHMI IYER, CEO-INVESTMENT ADVISORY, KOTAK INVESTMENT ADVISORS LTD"India budget 2023 has offered a multi-dimensional view. The 3 Cs which stand out are - Capex increase - consumption boost - capital gains tax status quo. Additionally, the budget has provided significant direct tax benefits to individuals which will help increase disposable income and support spending. The budget keeps in mind the needs of future India while focusing on Artificial Intelligence and machine learning.

☆ Watch CNBC's full interview with BofA's Savita Subramanian
▼ + stars: | 2023-01-30 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with BofA's Savita SubramanianSavita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, joins CNBC's 'Squawk Box'' to discuss the year's equity market performance, bond yields, and more.

☆ Recession 2023: Jerome Powell's Legacy Will Dictate Inflation, Stock Market, Economy
▼ + stars: | 2023-01-30 | by ( William Edwards | ) www.businessinsider.com time to read: +15 min

This obsession with controlling inflation — and potentially causing serious pain for average Americans — is driven by one major factor: legacy. High inflation eats away at consumers' purchasing power, and persistent inflation seeps into expectations for price and wage adjustments, which further fuel inflation. What's more, the full impact of the Fed's rate hikes have yet to hit. Legacy actsThere are signs that certain Fed officials are ready to dial back on the inflation fight. And navigating such a tricky economy — without throwing hundreds of thousands of Americans out of work — could cement Powell's legacy.

☆ The market has 'decoupled,' says BofA's Savita Subramanian
▼ + stars: | 2023-01-30 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe market has 'decoupled,' says BofA's Savita SubramanianSavita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, joins CNBC's 'Squawk Box'' to discuss the year's equity market performance, bond yields, and more.

☆ Lowe's will no longer outsource its ad sales business as it gears up to grab a bigger piece of the $45 billion retail media opportunity
▼ + stars: | 2023-01-30 | by ( Lauren Johnson | ) www.businessinsider.com time to read: +2 min

Lowe's will no longer outsource its ad sales business, and will take full control of it this year. The shift is meant to help Lowe's grab even bigger retail ad budgets than it did before. But this year, Lowe's is taking full control of its own ad sales, said Abi Subramanian, VP and GM of Lowe's ad arm, the One Roof Media Network. Unlike the retail business, ad sales has high margins. Insider Intelligence forecasts that retail media will be a $45 billion market in the US this year, with Amazon controlling 76% of spend.

☆ A notorious market bear who called the dot-com bubble warns that stocks will face losses rivaling 1929, 2000, and 2007 as high valuations and poor investor sentiment create a "trap door" scenario
▼ + stars: | 2023-01-28 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

There are two major driving forces of stock-market returns, according to John Hussman: valuations and investor sentiment. "Put simply, we estimate that the S&P 500 faces the same prospect of full-cycle loss and return-free risk as it did in 1929, 2000, and 2007. The S&P 500, in its current form since 1957, fell more than 46% from 2000-2002 and more than 52% from 2007-2009. Hussman FundsAs for investors sentiment — or what Hussman calls "market internals" — he uses a proprietary measure of the uniformity of investor behavior. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009.

☆ Premarket stocks: Wall Street is ignoring the Fed. That could be dangerous
▼ + stars: | 2023-01-27 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Price increases are also moderating: December brought the sixth consecutive monthly fall in consumer price index (CPI) inflation to 6.5%. That’s a change from 2022 when the Fed and the market tended to move in unison. This could mean that the upcoming Fed meeting will generate a lot of market disappointment, said Christian Scherrmann, an economist at DWS Group. The Fed flagged investors’ persistent belief in a pivot away from elevated rates as something that could hurt efforts to restore price stability. But even though the lawsuit drives at the heart of Google’s revenue machine, it could take years to play out.

☆ Company outlooks so far paint a dreary 2023 earnings picture, BofA says
▼ + stars: | 2023-01-23 | by ( Scott Schnipper | ) www.cnbc.com time to read: +2 min

The early 2023 corporate earnings outlooks that companies are issuing alongside actual fourth-quarter results are deteriorating, Bank of America equity and quantitative strategist Savita Subramanian wrote in a report Sunday. As a result, S & P 500 earnings estimates for 2023 have already fallen 1% — but are 10% down from where they were at the peak in June 2022. "Early signs are troubling," with an in-house "S & P guidance ratio" falling into the 10th percentile, signaling that "corporate misery [is] rising." What's worse, analysts' estimates had already fallen 7% coming into the reporting period, Subramanian said. She noted the same disconcerting early earnings trend, headlining a report out on Monday with, "EPS Backdrop Continues To Soften."

☆ Elon Musk returns to the stand in class-action lawsuit over controversial tweet
▼ + stars: | 2023-01-23 | by ( Matt Mcfarland | ) edition.cnn.com time to read: +3 min

Washington, DC CNN —Tesla CEO Elon Musk took the stand again on Monday morning in a California courtroom to testify for a second day in the lawsuit over his controversial “funding secured” tweet from 2018. Musk had spoken to executives of the Saudi sovereign wealth fund about the funding he would need to take Tesla private. However, it was anything but “secured.” Musk shared his recollection of the incident in his testimony Monday. He pointed to an incident in May of 2020 when he tweeted that “Tesla stock price is too high.” The stock price dropped the day of his tweet but recovered and closed the year higher than it had opened. Musk testified Friday that no one at Tesla reviewed his tweets in 2018 before he published them.

He called it the most democratic way to communicate but said his tweets did not always affect Tesla stock the way he expected. "Just because I tweet something does not mean people believe it or will act accordingly," Musk told the jury in San Francisco federal court. [1/5] Tesla CEO Elon Musk testifies during a securities-fraud trial in San Francisco, California, U.S., January 20, 2023 in this courtroom sketch. Earlier on Friday, Tesla investor Timothy Fries told the jury that he lost $5,000 buying Tesla stock after Musk sent the tweet, which sparked volatile swings in Tesla's stock. Musk's attorney, Alex Spiro, told the jury in his opening statement Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen.

☆ Elon Musk takes the stand in his ‘funding secured’ tweet trial
▼ + stars: | 2023-01-20 | by ( Matt Mcfarland | ) edition.cnn.com time to read: +1 min

CNN —Tesla CEO Elon Musk took the stand in a California court room Friday to testify in the class-action lawsuit over his controversial “funding secured” tweet in 2018. Musk has said at the time that he was thinking about taking Tesla private at $420 a share. Musk argued that his tweets do not cause Tesla’s stock price to move higher or lower. He pointed to an incident in May of 2020 when he tweeted that “Tesla stock price is too high.”The stock price dropped immediately after his tweet but recovered and closed the day higher than it had opened the day. “To have no guardrails is very troubling,” Subramanian said of Musk’s Twitter account.

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